Yash Birla group may buy stake in Lapointe tools

TNNFeb 3, 2003, 01.47am IST

MUMBAI: The Yash Birla group may pick up a stake in the UK-based company Lapointe as part of its strategy to strengthen the tools business. Lapointe is the JV partner of the Yash Birla group in Dagger Forst Tools. Lapointe had acquired the global businesses of the Yash Birla group's original partner Forst.

The group chairman Yash Birla told ET that Lapointe had given a proposal for investment. The group is examining the proposal, he added. Lapointe, in turn, may increase its stake in Dagger Forst Tools, possibly to 26%. Dagger Forst, a JV established in 1965, manufactures broaches, hops, shaper cutters and sharpening machines. Lapointe, with a $50m turnover, is widely acknowledged as a world leader in the manufacture of machines for turbine disc broaching and spline rolling. It has provided engineering solutions for the aerospace and power generation turbine industry. The Yash Birla group has a turnover of close to Rs 1,500 crore.

The proposed investment is part of a wider strategy to integrate and expand the machine tools business. As part of the strategy, the group is set to form a single marketing company for the entire business. Currently, the group's business is scattered among various companies including joint ventures.

In addition to Dagger Forst, Indian Tools, Birla Kennametal, Birla Perucchini are the companies engaged in the tool manufacturing business. While Birla Kennametal is a joint venture between the Yash Birla group and US major Kennametal, Birla Perucchini is its joint venture with Italian major Perucchini.

The Yash Birla group, which had bought out Japanese major Yamaha's stake in Birla Yamaha, is also in negotiations to form a JV with Italian company Maccalte. The group has already signed an MoU for the joint venture.

Though the modalities of the alliance is still under negotiation, the Yash Birla group proposes to pick up a majority stake. The joint venture company plans to set up a factory to manufacture alternators in Dehra Dun. Maccalte is planning to outsource three ranges of two pole alternators through the proposed joint venture.